Trina Solar is taking solar energy to the next level by rapidly growing into a worldwide supplier of solar modules
By James Buchanan
While solar photovoltaic (PV) technology has been around for 50 years, the recent boom of the last three or four years has spawned a number of new companies to enter this market. That is not the case with Trina Solar. Its 10 years in the market make it a pioneer in the sector.
“We were founded in 1997, which for the solar industry means we have been around a while and are one of the more established companies in the solar business,” states Andy Klump, VP of business development for Trina Solar. “The company founders had a vision of developing solar PV into an affordable energy alternative for the world and the company is growing very rapidly to achieve this goal.”
The company is also one of the few vertically integrated manufacturers in the business.
According to Klump there are five phases in the process of manufacturing usable solar panels. The first stage is to manufacture hyper pure polysilicon, which consists of purifying metallurgical grade silicon to the level of what is termed the six nines — purity of 99.9999 percent.
While this complicated chemical processing is one aspect of production that Trina does not handle, the company takes this polysilicon output and inputs this raw material into its monocrystalline and multicrystalline furnaces.
Through a melting and solidification process, the company produces silicon ingots. These ingots are then sliced into wafers using complicated wire-sawing equipment from one of its two Swiss-based equipment suppliers.
The next step is the processing of these wafers into individual cells through a series of processes including wafer texturing, silicon nitride deposition and screen printing to capture the electricity from the sun. The final stage of this process is the assembly of high efficiency cells into high powered modules which are the tools for the conversion of sunlight into electricity.
“We are vertically integrated from ingot, wafer and cell production to the final module assembly. Whereas most other companies just complete one or two parts of the value chain,” comments Klump.
“We are integrated throughout the entire value chain. Vertical integration yields a three-fold advantage,” he explains. “First, controlling the production process allows us to control and continually improve on the product quality. Second, by locating our manufacturing facilities at the same location in Changzhou, we can have the capability to reduce our cycle time and use our cash more effectively. Finally, by achieving a better cost position than our competitors, we can return more profit to our shareholders.”
While there are a number of solar manufacturers that outsource certain aspects of the value chain and hold fewer manufacturing assets, Trina has its assets in house.
“We have our own equipment assets and invest a significant amount of money to utilize best-in-breed equipment,” says Klump. “All of our facilities are located about two hours outside of Shanghai, China, in the town of Changzhou. Our equipment is purchased from around the world — primarily in the U.S., Germany, Italy and Switzerland — and our suppliers work closely with us to ensure timely delivery and to provide strong after sales support and service.”
While the company has a sales presence in a number of countries, the company also has a strong history of promoting solar within the Chinese market.
According to Klump, China instituted a rural electricification program as early as 2002 and 2003. This program was known as the Chinese Western Brightness Program, which was introduced with the goal to bring electricity to rural Tibet.
“This project really helped validate our success as a pioneer in the industry, as Trina Solar was the only non-state owned enterprise to be selected to participate in this program,” he explains. “As a result of this program, and our development of a research and development center for solar PV in 1999, Trina Solar has developed a very close relationship with the government and has been recognized as a leader in the sector.”
Further, the company has been able to grow its manufacturing capacity at its facility rapidly and estimates that it will have 150 megawatts of capacity by the end of 2007, with an actual production output of modules that will produce 75 to 80 megawatts of power for its customers.
“Manufacturers in this industry measure manufacturing capacity by the amount of power that could be generated from the solar panels over the course of one year,” says Klump “and we have successfully executed according to our growth plans.”
Beyond China, Trina has focused its sales on countries such as Germany, Spain and Italy. Currently, the company is working to enter the U.S. market later this year after obtaining its UL certification. The company sells to companies that install solar systems, wholesalers, and distributors.
Asked what makes his company unique, Klump points to the company’s vertical integration of the value chain as a key differentiator.
He then explains that Trina Solar has distinguished itself with its proprietary technical processes and know-how.
“We use different types of reclaimable silicon,” says Klump. “We can actually use reclaimable silicon in our furnaces that used to be considered waste from the semiconductor industry because we have developed our in-house processing equipment.”
Trina Solar takes this reclaimable silicon from some semiconductor manufacturers —which may actually have a higher purity level than solar grade silicon — and then mixes it with other sources of polysilicon. The resulting mix is well within the purity range required for solar purity, as our high qualify wafers produce leading cell efficiencies of 16.3%, remarks Klump.
“So in essence, by recycling the scrap from the semiconductor industry and using it more effectively than our competitors,” he explains. “We can save the cost of the silicon which has been an important cost driver for the industry.”
Klump also points to the company’s brand as being a distinguishing feature.
“We are a very well-recognized manufacturer, and have received a lot of strong feedback from our customers and partners. The market recognizes Trina Solar, not just as one of the leading brands among the Chinese manufacturers, but also among the global players,” he says.
Trina also boasts a strong and diverse internal management team, says Klump.
“We have 13 different nationalities represented in the company,” he says. “That international talent has been recruited by design because the solar photovoltaic industry is really an international industry.
“The company’s equipment suppliers and silicon suppliers come from a diverse array of countries in Asia, Europe and North America, so having people with the language skills and common cultural background allows us to build strong relationships with these suppliers,” he continues. “Furthermore, since customers are located all over the world, this same principle of common language and cultural background strengthens the company’s ability to sell its products globally.”
Asked about the company’s plans to enter into the U.S. market, Klump says the United States has tremendous potential to become the largest market globally. Over the last few years, the market has lagged behind other countries that have provided the federal government support for solar as an alternative source of energy.
In this regard, he says, Germany and Japan would be ranked one and two respectively, with the U.S. coming in third in the worldwide market.
Remedying this lack of national government support for solar is something that Klump and Trina Solar are working to change. In particular, Klump actively participates on the board of the Solar Energy Industries Association (SEIA). That association is currently lobbying Congress on the Energy Independence Act, which has received broad support in the House and Senate, but so far has not been passed onto President Bush to sign into law.
In particular, Klump and SEIA hope to ensure the bill includes an uncapped income tax credit for homeowners that would extend for eight years and encourage the residential market to install solar panels on their homes. The current legislation includes a provision for the commercial market, but this proposal would be greatly enhanced with a residential program as well.
Looking to the future, Klump says expanding into the U.S. market is a big component of the company’s growth strategy.
“We are also going to continue to reduce costs to strengthen solar so that it can be more broadly viewed as an economically viable energy source so that more people would purchase solar systems for their homes and business,” he asserts. “Working with SEIA to bring awareness to our congressional leaders is an important part of our strategy and Trina Solar looks forward to establishing its position as a leader in the US market soon.”